Marijuana ETFs are rushing to list on US exchanges after getting a green light from the Securities and Exchange Commission.
Provided that marijuana exchange traded funds can show an independent legal opinion that no holdings violate federal law, they can now list in the US, according to the SEC.
Until now, confusion about marijuana’s legal status has stopped Wall Street from participating too heavily in the industry. Although marijuana is legal in some states it remains illegal federally and some of the issues, particularly around federal banking law, are still being worked through.
Since April, five marijuana ETFs have listed, and they come in all different shapes and sizes: some are passive index-tracking funds, with the look and feel of an ETF; others have opted for active stock picking by industry gurus in an approach more characteristic of mutual funds.
Dave Nadig, managing director of ETF.com, says: “It feels like a greenfield opportunity, much like the dotcom stocks in the early 1990s. Investors feel like the Amazon of cannabis is going to come from somewhere.”
“[This] has caught investor attention in a way few things really do,” he adds. [Read more at Financial Times]